Nnsb Pares Down: Sells Another Branch

Newport News Savings Bank is selling its branch office in Warsaw, on the Northern Neck, to Peoples Bank of Montross.

The sale is in keeping with the Newport News thrift's new strategy of concentrating its resources on the Peninsula and Middle Peninsula, said the company's senior vice president, Charles D. Edmonson.

The financially troubled thrift closed its downtown Newport News office on Feb. 1. The savings bank is also in the process of dissolving Newport News Service Corp., its real estate investment subsidiary, and is seeking a buyer for Community Finance Co., which makes personal loans.

In a press release announcing the sale of the Warsaw branch, President Gordon L. Gentry Jr. said, "Our primary goal in the sale of this office is redeployment of our efforts, funds and energies in the Peninsula and Middle Peninsula markets, where we see more opportunities for growth.

"Logistically the Warsaw market is simply further from our primary market than we wish to be at this time," the release said.

Newport News bought the Warsaw branch in September 1985 from CrossLand Savings Bank. Newport News also has a branch office in Kilmarnock on the Northern Neck. Edmonson said the thrift has no plans to sell the Kilmarnock or any other offices.

The Warsaw branch has three employees and, as of Feb. 28, $8.7 million in deposits, Edmonson said. William R. Crews Jr., president of Peoples Bank, said the bank offered to retain all three employees. The sale was announced to the workers on Friday.

Peoples Bank of Montross has one office, located about 13 miles north of Warsaw, and $39.02 million in deposits as of Dec. 31, Crews said. Newport News Savings had $269.78 million in deposits on Dec. 31.

When a bank or savings and loan buys a branch from a competitor, the sales price is typically based on a percentage of the deposits held by the selling institution. Jasper R. Eanes, a former chief financial officer at Newport News, said buyers often buy a branch for between 3 to 6 percent of its deposits.

Crews said Peoples Bank will pay less than 3 percent of deposits for the Warsaw branch, which he called "a fair deal for both sides." Edmonson said the sales price will depend on the total deposits at the time of the transfer and on an appraisal of the property.

Crews said he was made aware by "intermediaries" that Newport News was interested in selling the branch. "It was in our general market area and we were interested in looking for ways for us to expand," Crews said.

The branch sale is subject to approval by state and federal banking and thrift regulators, which is expected to take three to six months. Peoples Bank is a commercial bank, while Newport News is a publicly-owned savings and loan.

Newport News had $23.7 million in non-performing assets as of Dec. 31, and has posted losses in each of the past four quarters.